Brian Estes, Founder of Off the Chain Capital: The Unknown Bitcoin OG

Brian Estes is a Bitcoin OG and the Founder of Off the Chain Capital, a crypto fund focused on finding value opportunities across the industry. In this conversation, Brian and Anthony discuss some of their awesome stories from the early days of crypto, investment strategies that have been quite profitable, and opportunities that are likely to present themselves over the coming years. CRYPTO. COM-----Crypto.com is a pioneering payment and cryptocurrency platform that seeks to accelerate the world's transition to cryptocurrency. With the vision of "cryptocurrency in every wallet", the Crypto.com App offers a full range of financial products with competitive pricing, well designed UX and high security. It is the best place to buy, sell and pay with crypto. TAXBIT-----Refund-maximizing, cryptocurrency tax software you can depend on. Visit taxbit.com/invite/pomp and receive 10% off your tax plan today by signing up for a free trial. ETORO-----This episode of Off the Chain is sponsored by eToro, the smartest crypto trading platform, and one of the largest in the world. Join 11 million other traders and create an account at etoro.com and build your crypto portfolio the smart way.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Anthony Pompliano?

  What's up everyone, this is Anthony Pompliano. Most of you know me as Pomp. You're listening to Off the Chain, simply the best podcast in crypto. Let's kick this thing off. Brian Estes is a Bitcoin OG and the founder of Off the Chain Capital, a crypto fund focused on finding value opportunities across the industry. Now you gotta give him respect. He found the Off the Chain name earlier than I did, so you know he has to be a genius. In this conversation, Brian told a number of awesome stories from the early days of crypto. He shared a few of their investment strategies that have been quite profitable, and we had a great conversation around the opportunities that are likely to present themselves over the coming years. This episode was a lot of fun to record, and I hope you guys enjoy it too. Now, before we get started though, I want to cover the three advertisers that

• 0:42Anthony Pompliano?

  made this episode possible. The first is Crypto.com. You may have seen their Plan B marketing campaign in major cities like LA, Miami, and San Francisco. These guys are absolutely crushing it. Last time I was in San Francisco, I was driving in an Uber, I looked over and I literally saw a sign on a trash can that said, "The $22 trillion money printing machine's not going anywhere." And then it said, "Plan B Crypto.com." Absolutely awesome marketing. Now Crypto.com is a crypto brand that's building an ecosystem with services in trading, payments, and finance. Their app is a single platform that allows you to buy, sell, store, and track crypto securely. You can pair it with their MCO Visa card to spend your crypto. You can earn interest on your crypto and stable coins, and you can even

• 1:27Anthony Pompliano?

  use your crypto to get an instant loan. Like I said, these guys are killing it on the marketing. They've been a longtime supporter of Off the Chain, and you can go to Crypto.com, not a bad URL, to go check out the ecosystem that they're building around trading, payments, and finance. Again, that's Crypto.com. Now, a new advertiser to the podcast is TaxBit. Everyone hates paying taxes. It's super confusing. You always get nervous that you're gonna mess something up, and there's so many different forms and information that you just don't know what you're doing. TaxBit can help. The IRS recently released new tax forms for the 2019 tax year, which require all taxpayers to attest to whether they traded cryptocurrency during the year. If so, you must file an IRS

• 2:10Anthony Pompliano?

  IRS 8949, whatever the hell that is, and that reports your capital gains and losses. That's a IRS 8949. Good luck if you don't understand tax. Now, what TaxBit does is it solves your problem. It automates your cryptocurrency taxes. It enables you to effortlessly track, calculate, and report your transactions, and it easily connects your exchanges to securely sync your transactions and run them through TaxBit Tax Engine. You can generate your completed tax forms with a single click. It's founded by tax attorneys and CPAs. TaxBit's the most trusted cryptocurrency tax solution. You can get 10% off your tax plan today with a free trial by going to www.TaxBit.com/invite/pomp.

• 2:54Anthony Pompliano?

  Again, that's TaxBit.com/invite/pomp. Now, my favorite part about TaxBit is they've got live support with experts. So you can literally call and email in and talk to somebody who has experience facilitating thousands of crypto tax filings and IRS crypto tax audits. Again, go to TaxBit.com/invite/pomp and let them know that I came. And actually, I sent you. I didn't come. I actually sent you. And you can get 10% off your tax plan today with a free trial. Now, lastly, eToro, longtime sponsor of eToro, massive business, highly underrated. Got started in Israel. They built this big business offering stocks, commodities, traditional currencies, and cryptocurrencies to people all around the world.

• 3:38Anthony Pompliano?

  Last year, leaped across the pond and came to the United States, and they got started by offering cryptocurrency trading. Now, I love these guys because they do two things that most other people don't do. They've got social trading and they've got copy trading. Social trading is basically the ability to have conversation around your trading activity. You can type in an asset, let's say Bitcoin. You can go to that page and you can see an entire conversation. It's like having a social network around that asset. You can see people sharing information, charts, predictions, etc., all around that one asset, and then trade there based on that information. Then they've got copy trading. Let's say that you find somebody on the platform that you think is super smart, maybe a better trader than you, and you want to do what that person is doing, right? You would give them your money if you could. Well, now you don't have to give them your money. You can simply copy their trades.

• 4:23Anthony Pompliano?

  There's a button, Copy Trader. When you hit that, eToro will mirror your portfolio to theirs. So if they go ahead and they buy an asset with 5% of their portfolio, your portfolio will buy 5% of that asset. If you go ahead and that person sells 5%, now your portfolio will sell as well. Think of it as just mirroring whatever that person does or copying their trades. So eToro's got social trading, copy trading. They're here in the US, offering cryptocurrencies. So pretty cool stuff. And to me, one of the coolest things about all of this is that eToro is actually larger than Robinhood, right? Robinhood gets a lot of press. They've got an $8-plus billion market cap in the private markets or valuation. But eToro is actually larger than they are. Just don't tell anyone. It's a great little secret.

• 5:06Anthony Pompliano?

  I like the company so much that we even invested over at Morgan Creek. So head on over to etoro.com, sign up for an account. Let me know what you think about their social trading and copy trading features. Again, that's etoro.com, etoro.com. One more time, etoro.com. All right, guys, and don't forget, this is not only a podcast for Off the Chain. I also write a daily newsletter. You can go to offthechain.substack.com. I put my personal analysis, daily news, etc., all in that email. Shoot it out to about 40,000 investors every day, hopefully providing as much value to you in written format over email as I do with this podcast. Super excited about all of these different sponsors. Go check them out. They make this all possible. Now let's get into this episode and have a little bit of fun today.

• 5:51Speaker 01

  Anthony Pompliano is a partner at Morgan Creek Digital. All opinions expressed by Pomp or his guests on this podcast are solely their opinions and do not reflect the opinions of Morgan Creek Digital or Morgan Creek Capital Management. You should not treat any opinion expressed by Pomp as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. This podcast is for informational purposes only.

• 6:17Anthony Pompliano?

  All right, guys. Bang, bang. I'm here with Brian, uh, who's probably one of the least known important people in crypto. I think is a fair way to say that.

• 6:28Anthony Pompliano?

  Thank you so much for, uh, for coming to do this.

• 6:30Speaker 02

  Yeah, thank you for having me.

• 6:31Anthony Pompliano?

  For sure. You live in, uh, Chicago.

• 6:33Speaker 02

  Nope.

• 6:34Anthony Pompliano?

  No, where do you live?

• 6:34Speaker 02

  Five hours south of Chicago.

• 6:35Anthony Pompliano?

  Where?

• 6:36Speaker 02

  Small town, 10,000 people in southern Illinois.

• 6:39Anthony Pompliano?

  Okay.

• 6:39Speaker 02

  So right outside of St. Louis.

• 6:41Anthony Pompliano?

  All right.

• 6:41Speaker 02

  Yeah, my wife and I decided to raise our kids in a small town, so.

• 6:45Anthony Pompliano?

  Not, what's the, uh, what's the reason for that? What was the logic there?

• 6:48Speaker 02

  Um, my wife and I grew up in a small town and we figured we turned out all right. So we figured, yeah, these kids, you know, we, we, we actually looked at, um, you know, I got recruited by Goldman when I was younger. And, um, we decided we didn't want to raise the kids in a city, so.

• 7:05Anthony Pompliano?

  Yeah.

• 7:05Speaker 02

  We just wanted to.

• 7:06Anthony Pompliano?

  Well, you've come to New York on a day where it's 25 degrees outside, so, uh, you're, uh, you're, you're a trooper for making this happen. But, um, cool, man. Let's, uh, let's start with, um, kind of early on in your life, right? So where, uh, what, what part of the, uh, country did you grow up in?

• 7:20Speaker 02

  So my dad was Air Force, so I grew up everywhere. So we moved around a lot. Um, I was born in, uh, Vacaville, California at Travis Air Force Base. So lived there till I was six, um, moved overseas. We lived in, um, the Azores Islands.

• 7:34Anthony Pompliano?

  Where's that?

• 7:35Speaker 02

  They're, um, islands off the coast of Portugal.

• 7:37Anthony Pompliano?

  Oh.

• 7:38Speaker 02

  So lived there for a couple of years, um, largest Air Force Base is there.

• 7:42Anthony Pompliano?

  What was that like?

• 7:43Speaker 02

  It was, it was actually great. I loved it. Um, so I remember going fishing with my dad one day and I caught an octopus. And they're like, so I was like seven years old and I'm like, reel in this thing in and, you know, I started crawling and like coming towards me. And my dad ran to the car and got a baseball bat and killed it. And then.

• 8:00Anthony Pompliano?

  Really?

• 8:00Speaker 02

  Uh, yeah. And then, uh, we didn't know what to do with it. It was like a baby octopus.

• 8:03Anthony Pompliano?

  Yeah.

• 8:04Speaker 02

  And, um, we didn't know what to do with it and, but our next door neighbors were Portuguese. And we gave it to them and they ate it for dinner that night. And it was like, totally freaked me out, but I remember it was sitting in like a five gallon bucket of water, you know? And I kept going and looking at it and stuff. It was so kind of scary, you know?

• 8:20Anthony Pompliano?

  It's not exactly something that would happen in southern Illinois, right?

• 8:23Speaker 02

  No, not at all.

• 8:24Anthony Pompliano?

  All right. So, so you guys were there and then where, uh, where'd you go after that?

• 8:27Speaker 02

  Um, then we moved to Tennessee. I was there for a few years. And then my dad got transferred to Scott Air Force Base, which is in southern Illinois. And so from sixth grade on, I was, you know, until high school, yeah, in, you know, Southern Illinois.

• 8:40Anthony Pompliano?

  Got it. And then you've lived most of your life in a wheelchair, right?

• 8:43Speaker 02

  Yeah, yeah.

• 8:44Anthony Pompliano?

  Let's talk about how, uh, how that all happened.

• 8:46Speaker 02

  Yeah. So I was 16 years old. Um, you know, I'm six foot four when I was 16, you know, 200 pounds, you know, good athlete.

• 8:53Anthony Pompliano?

  Well, you were six foot four at 16?

• 8:55Speaker 02

  I was six foot four at, um, when I was in eighth grade, actually.

• 8:57Anthony Pompliano?

  Jesus.

• 8:58Speaker 02

  When I was 14. Yeah. I was an early grower.

• 9:02Anthony Pompliano?

  Yeah.

• 9:02Speaker 02

  So, um, you know, and so I, yeah, I went to church that morning, went to the mall with a couple of my buddies. And we were coming home on a Sunday afternoon from the mall and, uh, hit a pothole and popped the front tire of my car. Put me into a skid into a telephone pole and I ended up, you know, severing my spinal cord from a, you know, you know, breaking my back, basically.

• 9:24Anthony Pompliano?

  Yeah.

• 9:25Speaker 02

  So, you know, broke two vertebrae, my left leg, left arm, punctured both my lungs. You know, I was in the hospital for like two months.

• 9:32Anthony Pompliano?

  So, so you're driving home, uh, you told me before that it was on like a country road, right? You had this pothole.

• 9:37Speaker 02

  Yeah. So I was in a Volkswagen Bug. So a 70, 1972 Beetle.

• 9:42Anthony Pompliano?

  Ah.

• 9:43Speaker 02

  No seat, no seat belts in there, you know?

• 9:46Anthony Pompliano?

  A VW Bug.

• 9:48Speaker 02

  Yeah, yeah. So, you know, being, you know, a big guy in a little car.

• 9:52Anthony Pompliano?

  Yeah.

• 9:52Speaker 02

  Full tank can, you know, it got crunched and when, you know, I was doing 45 miles an hour. So I wasn't going that fast. And, um, yeah, so that's.

• 10:00Anthony Pompliano?

  Got it. And so like, what is that like? You're 16 years old, right? You're playing sports, kinda, you know, I look, think back at me at 16. You basically think you're Superman, right?

• 10:09Speaker 02

  I was a pompous ass when I was 16, yeah.

• 10:12Anthony Pompliano?

  I think, I think every young athletic kid is, right? Like I have yet to meet one who, who's not. Um, but then all of a sudden you get this horrific injury. Is it something where they're like immediately, hey, you're paralyzed and, uh,

• 10:25Speaker 02

  I knew right away I was paralyzed. And so I, uh, right after the accident, I was still in the car. And there were like legs up in my face and I was pushing them away and I thought they were my friend's legs. And I can't, cause I can't feel them.

• 10:37Anthony Pompliano?

  Yeah.

• 10:38Speaker 02

  You know, and I was like, oh, those are my legs. So I knew right away I was paralyzed.

• 10:41Anthony Pompliano?

  And your friend ended up being okay?

• 10:43Speaker 02

  Yeah, he was fine. Yeah. He was totally fine. Cause I took the pole on my side.

• 10:46Anthony Pompliano?

  Yep.

• 10:46Speaker 02

  So.

• 10:47Anthony Pompliano?

  And so you. You go, I'm assuming there's a bunch of surgeries, physical therapy, etc. What is that just mentally having gone from, you know, the world at your feet to now it's like, hey, look, I've got to, you know, I've got this long road ahead to actually recover from this horrific injury.

• 11:02Speaker 02

  Yeah, so my dad said one thing that really, you know, actually said two things. He said, the first thing was that you didn't hit your head, which is a blessing, right?

• 11:11Anthony Pompliano?

  It's a good way to look at it.

• 11:12Speaker 02

  Yeah, right. So I got my brain. And the other thing is, you know, you play the cards that you're dealt. You know, and that's how I live my life, you know, this is what I was dealt, so I'll make the best of it. It really hasn't slowed me down.

• 11:24Anthony Pompliano?

  Yeah, well, and the part to me that is so fascinating when you talk to folks who have been through any kind of major obstacle in life, whether it's something that they had to do from a mental perspective, something that they did from a business perspective, athletically, right, physically, whatever, is a lot of times it is the mindset, right, that that completely changes. And when you're the, you know, 16-year-old kind of pompous ass athletic kid, right? It's almost like the physical advantages you have are good enough, right? And so you don't have to have as sharp of a mental, you know, kind of advantage. And you see this in some of the most elite athletes in the world, right?

• 12:05Anthony Pompliano?

  You know, it's almost like they get more serious and mentally change as they get older. Because their body starts to fail them, right? They can't jump as high, run as fast, etc. But it's usually not as extreme as, you know, one day, literally just a point in time. You know, the whole mindset changes.

• 12:22Speaker 02

  So, you know, so like, so I was in the hospital two months. You know, I went from 200 pounds to 140 pounds, lost 60 pounds. And then I got back to the gym and started killing it again. So I ended up being able to walk with a walker with leg braces on. I actually walked up and got my diploma when I graduated high school, yeah.

• 12:43Anthony Pompliano?

  Okay, how long is that after the injury?

• 12:45Speaker 02

  So this is two years, yeah. Yeah, so, and it's not really walking because I can't move my legs. So my legs were basically. Like stabilized. Yeah, stabilized and I was just like walking like Frankenstein, you know, just like swinging my legs up.

• 13:01Anthony Pompliano?

  Yeah.

• 13:01Speaker 02

  It's like I didn't want to graduate in a wheelchair, you know?

• 13:04Anthony Pompliano?

  I had somebody here yesterday who he recently tore his meniscus in his knee. Right. So obviously not nearly as serious, but he spent the last six or eight weeks with his leg in a straight brace.

• 13:15Speaker 02

  Uh huh. Yeah, exactly.

• 13:16Anthony Pompliano?

  Many who know I blew out my knee when I was in college and did the same thing.

• 13:20Speaker 02

  Yeah.

• 13:21Anthony Pompliano?

  And you have to relearn how to use your limb.

• 13:23Speaker 02

  Yeah.

• 13:24Anthony Pompliano?

  Right. And so you end up walking around and if you're not careful, you can actually hurt other parts of your body. Cause you're overcompensating all stuff.

• 13:30Speaker 02

  Yeah.

• 13:30Anthony Pompliano?

  But it's pretty cool that, you know, you say, hey, look, I'm gonna, I'm gonna walk across there.

• 13:34Speaker 02

  Yeah. So, so I did. And then I ended up getting a wheelchair basketball scholarship, play basketball at University of Illinois.

• 13:40Anthony Pompliano?

  We gotta talk about that. What was going on wheelchair basketball?

• 13:43Speaker 02

  Like to me that is. Such a thing when I was in high school, you know?

• 13:46Anthony Pompliano?

  Yeah.

• 13:46Speaker 02

  And I got a call from, cause you know, I was being recruited by Michigan and Oklahoma to play football.

• 13:52Anthony Pompliano?

  Mm hmm.

• 13:52Speaker 02

  And I got a call from University of Illinois coach, wheelchair basketball coach. And he asked, you know, if I'd like to play basketball. And last time I played competitive basketball was in eighth grade and.

• 14:04Anthony Pompliano?

  When you were six, four.

• 14:05Speaker 02

  Yeah, when I was six, four. But hey, we had a seventh grader that was six, seven.

• 14:08Anthony Pompliano?

  Really?

• 14:09Speaker 02

  Yeah. Yeah. So we did alright that year.

• 14:11Anthony Pompliano?

  What are they putting in the water over there?

• 14:12Speaker 02

  I don't know.

• 14:13Anthony Pompliano?

  Could you dunk in eighth grade?

• 14:14Speaker 02

  I did dunk and I got a technical foul. Yeah, I did. Yeah. It was a rebound. I dunked and hung on the rim a little bit and.

• 14:22Anthony Pompliano?

  Yep.

• 14:23Speaker 02

  Yeah. Got kicked out of the game, actually.

• 14:24Anthony Pompliano?

  I, I remember being in eighth grade, there was nobody dunking, but we would lower the rims. Cause they had their, like the retractable or removable rims. And we used to put it down, I think like six foot, seven foot, whatever it was. And, and they would watch like the dunk contest and kids would, you know, through the legs, behind the back, all this crazy stuff. And then we'd get in the games and guys were missing layups.

• 14:46Speaker 02

  Uh huh. Yeah, exactly. Yeah.

• 14:48Anthony Pompliano?

  But you're, you're over here dunking in eighth grade.

• 14:51Speaker 02

  So

• 14:51Anthony Pompliano?

  All right, so you go to play wheelchair basketball?

• 14:53Speaker 02

  Yeah, um, we won the national championship.

• 14:56Anthony Pompliano?

  Really?

• 14:56Speaker 02

  Uh, four years in a row.

• 14:58Anthony Pompliano?

  Wow.

• 14:59Speaker 02

  Um, no, it wasn't because of me, though. Yeah, I wasn't a very good wheelchair basketball player. So, um, but yeah, it was, it was, you know, good to be competitive again.

• 15:07Anthony Pompliano?

  Yeah.

• 15:07Speaker 02

  Yeah.

• 15:08Anthony Pompliano?

  How did, uh, I have no, uh, um, inside knowledge of wheelchair basketball. Do you dribble?

• 15:13Speaker 02

  Or is it just? You get two pushes on your wheelchair and then you have to dribble. So it's traveling if you have three pushes.

• 15:20Anthony Pompliano?

  Really?

• 15:20Speaker 02

  Yeah, so that's.

• 15:21Anthony Pompliano?

  So basically, if I pass you the ball, you

• 15:23Speaker 02

  I could push twice.

• 15:24Anthony Pompliano?

  And then you have to dribble.

• 15:25Speaker 02

  To dribble, yeah.

• 15:26Anthony Pompliano?

  And, uh, how do you stop? Like, like I'm dribbling, right? All of a sudden, you're a defender.

• 15:33Speaker 02

  One hand.

• 15:33Anthony Pompliano?

  Oh, got it. And then you just basically stop it.

• 15:35Speaker 02

  Yeah, you dribble with one hand and put use your other hand to stop the chair.

• 15:38Anthony Pompliano?

  That's crazy.

• 15:39Speaker 02

  Yeah, and it's almost like, you know, like Smash Derby, you know?

• 15:44Anthony Pompliano?

  Yeah, well, I would imagine you run into each other all the time.

• 15:46Speaker 02

  And, you know, like you tip over and then your legs are flying everywhere and like, it's kind of, yeah. It's a little wild.

• 15:52Anthony Pompliano?

  And it's five on five?

• 15:53Speaker 02

  Yeah, it's five on five.

• 15:54Anthony Pompliano?

  Full court?

• 15:54Speaker 02

  Yeah, full court, yeah.

• 15:56Anthony Pompliano?

  Wow, that's crazy. All right, so you do that and then, uh, you graduate?

• 16:00Speaker 02

  No, graduate, yeah. You, um, uh, one of the other things too, when I was at University of Illinois is that,

• 16:07Speaker 02

  um, I was asked to go to Cambridge University, um, that represent the university for the economics program.

• 16:12Anthony Pompliano?

  Okay.

• 16:13Speaker 02

  So I studied at Cambridge and learned school of economics, um, as an undergrad.

• 16:16Anthony Pompliano?

  What was that like?

• 16:17Speaker 02

  It was great. I mean, I, me and Stephen Hawking were like two guys in wheelchairs at Cambridge, so it wasn't very accessible. And yeah, it was, it was hard to get around, but it was worth it. Yeah, it was worth the sacrifice to, to, to do that.

• 16:31Anthony Pompliano?

  Yeah, and any like one or two memories from there that you're just like, this like really

• 16:35Speaker 02

  Yeah, I mean, actually.

• 16:36Anthony Pompliano?

  Tells like what it was like?

• 16:37Speaker 02

  Yeah, so, um, Sir Isaac Newton actually was a professor at Cambridge. And, um, so one of the lessons that we learned when classes that we took was about the history of stock market bubbles and history of bubbles, because he lost all his money, um, in the Southeast bubble, um, died penniless. And that's one of the lessons that we learned there. So we learned about S-curves and, um, stock market bubbles and, you know, the history of all that. So

• 17:03Anthony Pompliano?

  That's pretty cool.

• 17:04Speaker 02

  And that's one thing I've used throughout my career as an investor.

• 17:07Anthony Pompliano?

  Yeah. So, all right. So you go, you got, uh, University of Illinois, then go Cambridge, come back to Illinois.

• 17:14Speaker 02

  Come back to Illinois, graduate and a bachelor's degree.

• 17:16Anthony Pompliano?

  Do we walk across the, uh?

• 17:17Speaker 02

  No, no, not anymore.

• 17:19Anthony Pompliano?

  Rolled across?

• 17:20Speaker 02

  Yeah, rolled across.

• 17:21Anthony Pompliano?

  Uh, all right. So get the degree and then, uh, at 22.

• 17:24Speaker 02

  Yep.

• 17:25Anthony Pompliano?

  Got to go out into the, uh, into the world, man.

• 17:27Speaker 02

  Yeah. First job was at, um, McDonald Douglas.

• 17:30Anthony Pompliano?

  Okay.

• 17:31Speaker 02

  Um, you know, you know, I was just like making $23,000 a year, pricing out contracts for the Harrier jet.

• 17:37Anthony Pompliano?

  Mm-hmm.

• 17:37Speaker 02

  And, um, this is 1990 Gulf War started. There was a recession. Um, ended up getting laid off because McDonald Douglas was cutting back and I always wanted to be a stockbroker. So I called around and I got an interview with Shearson Lehman Brothers and they-

• 17:52Anthony Pompliano?

  Never, never heard of them.

• 17:53Speaker 02

  Yeah, I know. So I ended up getting hired there, go through their new broker training program. This is late 1990 and, um, really excited to do that. And then the Gulf War started in 91, January 91, and they canceled the training program.

• 18:06Anthony Pompliano?

  Really?

• 18:07Speaker 02

  Yeah. So I was out there too. And so, but the branch manager at Shearson, um, used to own a brokerage firm with a, a guy who ran AG Edwards and Sons in St. Louis. So he referred me over there and I went to go talk to Charlie and, um, so I'm 22. I go into the interview.

• 18:24Anthony Pompliano?

  You're 22, all right. You're 22 at 16, you're in a wheelchair. You win four national championships in college and then in the span of, it sounds like a couple of months, you lose two jobs.

• 18:33Speaker 02

  Yeah, exactly right. Basically, yeah. And, um, so I go talk to Charlie and, um, go in the interview and we, we sat at his desk and he goes, how old are you? And I'm like 22 and, and he goes, I don't have very good luck with 22-year-olds. And he just shut up. Like he didn't say another word for an hour. And so I started talking and going through my business plan and how, you know, as I bring in client stage yet or words and build my business. And I just kept talking and talking. He finally told me to shut up. Yeah. And then he said, um, you know, why don't you go down to the home office, take a test, interview with our, um, vice chairman and, um, Donna Casey and, you know, see where that goes. So I went down there, interviewed with her and, um, she asked me during the

• 19:16Speaker 02

  interview, it was really weird. She goes, pick something out in this room and sell it to me. And I was thinking to myself, like, what does this have to do with being a stockbroker? Because I thought being a stockbroker was like managing money for people, right? But it was a sales job, you know? And that's when I first learned that being a stockbroker was a sales job.

• 19:33Anthony Pompliano?

  Yeah. What'd you pick? You remember?

• 19:35Speaker 02

  It was a pencil.

• 19:35Anthony Pompliano?

  A pencil?

• 19:36Speaker 02

  Yeah.

• 19:37Anthony Pompliano?

  What was the pitch?

• 19:37Speaker 02

  Yeah, the pitch was that it was a brand new number two pencil with a, you know, red eraser on it, never been used, you know, shiny yellow coat of campaign on it. Yeah, I was like, you know, I was pitching that pencil hard.

• 19:51Anthony Pompliano?

  She's like, now I got the best pencil in the world.

• 19:53Speaker 02

  Yeah, she was happy with that, yeah.

• 19:55Anthony Pompliano?

  All right, so we ended up getting the job.

• 19:57Speaker 02

  Got the job.

• 19:58Anthony Pompliano?

  And, uh, and kind of what, what was that experience like? And, and I know you learned a lot of lessons there and stuff, so maybe kind of share some of those as well.

• 20:05Speaker 02

  Yeah, so, um, as a new broker, um, you know, we were, you know, you got this opportunity to be broker of the day. And when you're broker of the day, you take in the walk-in clients or people that call in. So this is like-

• 20:16Anthony Pompliano?

  Do you want to be broker of the day?

• 20:18Speaker 02

  The older guys didn't, but when you're a new guy with no clients, yeah, you want to be a broker-

• 20:22Anthony Pompliano?

  Every day.

• 20:22Speaker 02

  Every, yeah, every day, yeah. And, um, so I had this elderly lady come in, she was in her late seventies. Name was, um, Mrs. Smith, yeah. And, um, she ended up being one of my best clients. And she came in, she said she came from her lawyer's office and they just set up a trust for her. And she was a widow and she wanted to get everything re-registered into the trust name so that when she passed away, her beneficiaries could, you know, have easy access to the money. And she asked me to go to the bank with her and clear out her safe deposit box. And I thought that was kind of weird, but I was like, yeah, I'll go do that. And so we go over to Boltman's Bank and helping her clear out her safe deposit box. And get back to the branch and we're booking in the securities with the cashier.

• 21:05Speaker 02

  And I noticed that she had a lot of Walmart certificates in there. And, and the way that systems worked back then, you had to wait till the next day till everything batched to see how much she actually had. So I sort of come back the next day and we'll meet and review everything. So she comes back and, um, we pull up the account and she had like almost $2 million with a Walmart stock. And in addition to other things.

• 21:27Anthony Pompliano?

  This is in 1991?

• 21:28Speaker 02

  1991, yeah.

• 21:29Anthony Pompliano?

  Wow.

• 21:30Speaker 02

  And I asked her to tell me the story, like, you know, how'd you get involved with Walmart? And she said her sister in 1974 went to work for Walmart and she said it was a good company. And so she ended up investing $11,000 in Walmart. And it kind of hit me like, well, you invested 11,000 and 17 years later in 1991 is worth almost 2 million. And after she left the office, I pulled up a value line report just to kind of see what Walmart did over that period. And I noticed on the chart that there were four periods where Walmart dropped 50% or more during that 17 year period. So there were four times where she'd lost half of her money. But since she was collecting the stock certificates and putting them in her safe deposit box,

• 22:15Speaker 02

  she wasn't, you know, she wasn't checking the price every day. She wasn't actually getting brokerage statements, you know, because everything was in her safe deposit box. So there were probably times where she lost, like it went from a million dollars to a half a million dollars. And she didn't even know and she didn't care. And, and that's really where it hit me that, you know, to be a successful investor, you have to focus on the long term. You know, you can't let daily price fluctuations and, you know, movements. And so you have to, you know, let time smooth out the volatility. You know, because everything's volatile, but if you add enough time to it, it smoothes all that out. And I, I think successful investors, you know, could apply that, you know, that lesson.

• 22:55Anthony Pompliano?

  Yeah.

• 22:55Speaker 02

  Especially in Bitcoin and crypto.

• 22:57Anthony Pompliano?

  Yeah. And we were talking beforehand, like another data point here is we think it's fidelity. We can't all do it, but when Josh Brown from Ritz-Holt came over, he came on the podcast. He said that there was this study done that supposedly has been scrubbed from the internet. And that study was they looked at all their clients that who had the best performing portfolios over long periods of time. And they measured it, you know, by appreciation of value, et cetera. And the two that had the best performance were people who lost their passwords or had died.

• 23:26Speaker 02

  Right, that's exactly right.

• 23:28Anthony Pompliano?

  So it's this idea that like, actually, if you pay attention to the headlines, you will succumb to fear and greed and human bias, right? It is emotion. It is why psychological, you know, analysis of markets is so accurate. And I think that what we're seeing, one is obviously a very kind of a rapid rise of the machines trading, right? They don't have those, those human emotions. But also, two is, no matter what the asset class is, no matter what the market is, like, there's some core kind of best practices, not even rules, but just best practices that help people navigate these markets, and that's one of them, right?

• 24:09Anthony Pompliano?

  It's just like, look, having very, very long time horizons is super helpful when you're investing in the right thing.

• 24:16Speaker 02

  Right.

• 24:17Anthony Pompliano?

  Right? How do you think how that compares today to crypto?

• 24:21Speaker 02

  So I see it all the time, you know, people getting up at like 3:00 in the morning to check their coin cap, you know, just like, you know, yeah, I do the same thing, you know, but I have enough discipline now over 30 years to just let it go, you know? You know, and I've traded myself probably out of half of my Bitcoin over the past six years.

• 24:41Anthony Pompliano?

  Really?

• 24:41Speaker 02

  Yeah, you know, even though I know that lesson, you know, but I'm to the point now, I'm not selling anymore, you know, you know, so, yeah.

• 24:48Anthony Pompliano?

  And so what other lessons did you learn when you're kind of a, you know, young twenties stockbroker, and I'm sure that there's all kinds of fascinating things that you did.

• 24:56Speaker 02

  Yeah, so another one was, so I really didn't know what I was doing, right? When you're 22, you know, so.

• 25:01Anthony Pompliano?

  You think you do.

• 25:01Speaker 02

  You think you do. I knew I didn't. So I went to talk to Leo, who was the oldest broker in the office.

• 25:08Anthony Pompliano?

  Okay.

• 25:09Speaker 02

  So he was almost 80 years old. Been in the business for 60 years, same company. AG had to start in 1887, so he didn't start way back then, but it was probably, you know, 1940s or whatever, when he started, 60s.

• 25:21Anthony Pompliano?

  You gotta respect somebody who's 80 and still showing up to the office.

• 25:24Speaker 02

  He worked there until he was 105. Yeah, he died at the office.

• 25:29Anthony Pompliano?

  Really?

• 25:29Speaker 02

  Yeah.

• 25:31Anthony Pompliano?

  Yeah, must have loved it.

• 25:32Speaker 02

  Yeah, he loved it.

• 25:32Anthony Pompliano?

  Cause what that I guess that's a 85 years.

• 25:35Speaker 02

  Yeah.

• 25:35Anthony Pompliano?

  Right?

• 25:36Speaker 02

  Yeah.

• 25:36Anthony Pompliano?

  Damn. Alright, so you go to talk to him?

• 25:38Speaker 02

  I go talk to Leo and I was like, Leo, I'm new. You know, it's my first week here. Can you tell me, you know, you've been here for 60 years.

• 25:47Anthony Pompliano?

  You must know something.

• 25:48Speaker 02

  And he didn't say anything. He slid a piece of paper across the desk to me. And I looked at it and it was a value line report on Berkshire Hathaway. And he goes, just put all your clients in this. And I looked at it and it was $4,500 a share.

• 26:02Anthony Pompliano?

  $4,500 a share in 1991 Berkshire Hathaway, okay?

• 26:05Speaker 02

  And I was like, I was like, you're crazy. Like, no one's gonna buy a $4,000 stock. You know, like, who buy, because I didn't know the difference between price and value.

• 26:15Anthony Pompliano?

  Yep.

• 26:15Speaker 02

  I didn't know how to value a company. You know, I just saw the price. You know, the price was 4,500. And today Berkshire Hathaway is what, 340,000 or something?

• 26:25Anthony Pompliano?

  Crazy.

• 26:25Speaker 02

  You know, 30 years later. And, um, and that's, you know, one of the lessons I learned too, is that you have to know the difference between price and value. You know, like, people today look at Bitcoin and they look at the price at 8,000. They don't know what the value is. What's the value of Bitcoin? And that's what you have to figure out. You know, if the value is something more than 8,000, you want to buy it. If it's something less, then you probably want to sell it.

• 26:48Anthony Pompliano?

  Yeah. And I guess really part of that is not only one, a lesson on Berkshire Hathaway, right? But also just more systematically of the price and value. Did you learn that by asking questions to them? Did you kind of?

• 27:02Speaker 02

  No, I never bought any Berkshire Hathaway. I was like, no, I mean, I'm not buying a $4,000 stock.

• 27:08Anthony Pompliano?

  So how did you end up learning the difference between price and value?

• 27:10Speaker 02

  Just over time. Yeah, over time, you know, being in the business for, you know, 20 years as an institutional equity broker. And, you know, you just kind of figure it out, you know, and looking back over my life. You know, like, I should have bought Berkshire Hathaway at 4,500, you know?

• 27:26Anthony Pompliano?

  Yeah, hindsight's 2020, right?

• 27:27Speaker 02

  And I think that people, I feel the same way 30 years from now, when they look at Bitcoin. I think 30 years from now, people are like, man, I should have bought it at 8,000. You know, and it's whatever it is in the future.

• 27:38Anthony Pompliano?

  Of course. What, um, what was the first time you ever heard about Bitcoin or crypto?

• 27:43Speaker 02

  So it was 2013, was a, you know, investment manager managing $350 million for a small number of endowments and foundations in St. Louis area. Had a nice, easy life, you know, raising the kids, you know, and saw Tyler and Cameron Winkleboss on CNBC talking about it. At the time, it was $100. And, you know, I didn't know anything about Bitcoin. I just kinda, I thought it was kind of a scam. I thought these guys were doing a pump and dump. You know, talking about Bitcoin on CNBC, you know, they own 1%, they're trying to pump up the price. And so I kinda put it on my watch list because I'm a value investor. And

• 28:23Speaker 02

  so I watched it go from 100 and then Congress held hearings in 2013 and that pumped up the price to like 400. And then IRS came out with guidance and called it a, called a property and that's how they're gonna tax it. And then it shot up to like 800 and then got it to 1200, the Mt. Gox got hacked and then it crashed down to 300. And that's when I kinda took a dive into it. Why? To figure out, I'm a value investor. I figured the suckers were washed out. If it was at 1200, it's at 300 today. There's probably some value opportunity there. And I wanted to figure out where the opportunity was. What'd you do to go figure that out? I read the Satoshi Nakamoto white paper. I mean, that's It's a good place to start. I go, well, what is Bitcoin? And that was one of the things that popped up. And

• 29:08Speaker 02

  as soon as I read that, it like clicked. Like, when I was in high school, I used to code and like Fortran and Pascal and Cobol and all those ancient languages and, you know. There's some young kid listening right now, like, what the hell is he talking about? So I had this, you know, kinda like computer science background when I was in high school. And then I had a financial background, you know, being a stockbroker. And it kinda all came together when I read that. And I saw as clear as day how we're gonna rebuild the financial system that we have today on blockchain technology. And I told my wife, I was like, you know, I need to get involved with this. And it was kinda weird, but, you know, I couldn't sleep for like a week. You know, I'd lay in bed and

• 29:52Speaker 02

  she could feel the heat radiating off my body. And she would yell at me like, like, just go to sleep, you know? Yeah, yeah. I can't, you know? And so, so I told her, you know, I want to do this. And I go, the best way I think is be a, become a VC, like a venture capitalist in the space and help build. And she was like, what's a VC? I was like, I don't know. That's what everyone else does when they want to build things. And so I kind of tried to figure out what a venture capitalist is. And she goes, how much does that pay? And I was like, I don't think it pays anything. I think we're like writing checks all day.

• 30:26Anthony Pompliano?

  It's the other way. The money's going out, not coming in.

• 30:28Speaker 02

  So she was kind of nervous about that. And she wrote down on a piece of paper, you know, a number, and she goes, put this in the checking account and go do what you want. And so that's what I did.

• 30:39Anthony Pompliano?

  That's a pretty good partner in life, huh?

• 30:42Speaker 02

  So we've been dating since high school. So yeah, it's, yeah, she's been a great wife. So 27 years now I've been married.

• 30:49Anthony Pompliano?

  Wow.

• 30:49Speaker 02

  Yeah. And so I put that in the checking account, sold my practice to Wells Fargo, and became a VC in blockchain. And just kind of like, and I didn't know what to do. Like, I felt like a new broker again, right?

• 31:02Anthony Pompliano?

  So what'd you do when you're like, okay, shit, I'm here?

• 31:07Speaker 02

  So this probably sounds kind of desperate, but I went in to like, go meet VCs, right? And figure out like, how to do it. And so I called some up and they want to meet with me. And so I know, I looked on Charity Buzz. You ever heard of Charity Buzz?

• 31:21Anthony Pompliano?

  No, what's that?

• 31:21Speaker 02

  Charity Buzz is a website where people donate items or meetings, and then you buy them and that money goes to their favorite charity.

• 31:31Anthony Pompliano?

  Okay, that's a pretty good idea.

• 31:32Speaker 02

  Yeah. So when I was flipping through Charity Buzz, I noticed there were a lot of VCs offering meetings.

• 31:37Anthony Pompliano?

  Ah.

• 31:39Speaker 02

  So I spent about $10,000 on Charity Buzz to get like six or seven meetings with VCs.

• 31:48Speaker 02

  So I met with some great VCs.

• 31:51Anthony Pompliano?

  Yeah, first of all, I don't, don't say names, but I wonder who's on there, right? There's a bunch of people probably going to look now.

• 31:56Speaker 02

  They know who they are, yeah.

• 31:58Anthony Pompliano?

  And two is, how do you set your price for something like that?

• 32:01Speaker 02

  It's auction. It's an auction. It's like.

• 32:03Anthony Pompliano?

  Oh, it's auction. Okay, all right.

• 32:04Speaker 02

  Yeah, yeah, yeah.

• 32:04Anthony Pompliano?

  So they don't get to set the price. It's whatever the market will put it for.

• 32:07Speaker 02

  Yeah, it's, it's an auction format.

• 32:08Anthony Pompliano?

  Okay.

• 32:09Speaker 02

  So, yeah.

• 32:10Anthony Pompliano?

  All right. So you go and you meet with them. And what's that conversation like? Do they, do they take it seriously? Or are they like, oh, this is raising money for charity? And so they just like want to screw around?

• 32:20Speaker 02

  No, no, they're, yeah, no, it's, you know, very good meetings. Yeah, so.

• 32:26Anthony Pompliano?

  And what'd you learn from them?

• 32:27Speaker 02

  So I learned what a VC did, you know, like, you know, how to get involved and

• 32:31Anthony Pompliano?

  Depending who you ask, some of them probably have bad definitions.

• 32:35Speaker 02

  Yeah, so some of them weren't very good VCs and, you know, they told me their life stories and some of them were, you know, the top VCs in the nation. And, you know, I learned a lot from that. And one of the things I learned, I was meeting with one of the VCs at A16Z, Andreessen Horowitz.

• 32:52Speaker 02

  And, you know, we were talking and I wanted to get into Coinbase and I knew they just did the seed round and the A round. And I asked her like, can you get me into Coinbase, you know? And she's like, well, why do you want to buy Coinbase when you could buy Bitcoin? And I was like, well, because it's a company. And being from a traditional finance background, I thought the best way to, you know, make investments with companies. And she goes, no, no, no, you're all wrong. She goes, all the partners at A16Z, Andreessen, you know, we're buying Bitcoin, Coinbase, we have to buy Coinbase because that's you're mandated to build equity in companies. But she told me the partners were, you know, investing Bitcoin directly. And I thought she was just trying to make me feel better,

• 33:35Speaker 02

  you know, because I couldn't get in. And so eventually I wiggled my way into the B round at Coinbase. And, but yeah, looking back, I mean, she was right. You know, Bitcoin did a lot better than Coinbase.

• 33:46Anthony Pompliano?

  Yeah.

• 33:47Speaker 02

  So Coinbase is not great.

• 33:48Anthony Pompliano?

  Well, I think, but I think that from the Series A probably, but I think the seed round, Coinbase has appreciated more or no?

• 33:56Speaker 02

  So I got into the, it's either the B or the C round. They went from A to C round.

• 34:01Anthony Pompliano?

  Okay.

• 34:01Speaker 02

  But so I guess that's the B round.

• 34:03Anthony Pompliano?

  Yeah, they did all kinds of.

• 34:04Speaker 02

  But so it was a $480 million valuation when I got in.

• 34:08Anthony Pompliano?

  Yeah.

• 34:09Speaker 02

  And

• 34:10Anthony Pompliano?

  So today we're sitting at just under $8,000 Bitcoin or so.

• 34:14Speaker 02

  Yeah. So and Bitcoin was 400.

• 34:16Anthony Pompliano?

  Yeah.

• 34:17Speaker 02

  When, so Bitcoin went from 400 to 8,000 and Coinbase went from $16 to it's about $200 today.

• 34:25Anthony Pompliano?

  Got it.

• 34:26Speaker 02

  So, but so Bitcoin did better.

• 34:28Anthony Pompliano?

  Yeah, yeah. Got it. And so you make the initial investment in Coinbase and you've continued to do, you know, a bunch of stuff with them. Kind of how did you think about that company and why were you so bullish on kind of what their prospects were?

• 34:39Speaker 02

  It reminded me of A.G. Edwards and Sons. So it's a brokerage model. You know, they're making, you know, at the time it was 1% commissions on buying and selling, you know, and that's how we made money at A.G. Edwards. Yeah, we charged commissions to buy and sell things. So it seemed like a natural model. So and as I dove deeper into Coinbase, when you're a broker, it's either the agency model or principal model. And I couldn't ever get the answer from Coinbase. I think they're doing both.

• 35:09Anthony Pompliano?

  Yeah, explain the difference for this.

• 35:10Speaker 02

  Alright, so on an agency model, you're making a commission. You're being the agent for the client. Okay, so you charge a commission. On a principal model, you're making money in the spread. So if a stock sells for 16, and this is back in the olden days when stocks trade for eighths and sixteenths, if there was a spread of six and a half cents or 12 cents, then you would make that spread, the difference between the bid and the ask.

• 35:35Anthony Pompliano?

  So basically, I'm willing to buy it at $13, you're willing to sell it at, you know,

• 35:39Speaker 02

  $13.50 or whatever.

• 35:40Anthony Pompliano?

  Whatever. Basically, we both execute the transaction and we're happy because that's what we were willing to do. But that difference between the bid and the ask is what the

• 35:49Speaker 02

  The 50 cent difference the broker makes, the brokerage firm makes, yeah. And I was an institutional equity broker for, you know, 14 years and that's how we made money. We made the money on the, between the bid and the ask. And so when I looked deeper into Coinbase, not only were they making the 1%, but like I said, I can never get the answer, but it looked like they were making money on the spread too. And that's a great model where you're double dipping like that, yeah.

• 36:14Anthony Pompliano?

  Yeah, got it. Okay, so you did Coinbase and then what else did you see out there that you got excited about?

• 36:19Speaker 02

  So I tried investing in 21Co. So because Andreessen Horowitz, yeah, yeah, Balaji. And so actually talked to Balaji. He said there was about a half a million dollars worth of stock left that Andreessen didn't take. And he asked me if I wanted it. I was like, sure, yeah, I'd love that. And he took it to their board and they said, no. So they're like, who's Brian? We don't know him, you know, and so I got shut out of that, which turned out to be, you know, Nice, because they ended up getting bought out by Coinbase. And so I actually looked at Digital Currency Group because I knew Barry from Second Market. I used to buy Facebook stock through him when it was a private company.

• 37:01Speaker 02

  And so I knew he started this digital currency group, which was involved in crypto. And I found one of the co-founders who needed money for private schools for his kids. And he was willing to sell me some DCG. So I bought some DCG stock from him.

• 37:17Anthony Pompliano?

  So this is an important thing, right? A lot of people, I think, definitely unaccredited investors don't know this world exists. And then even accredited investors, in the most part, don't know that this world exists. Where basically you can invest in the fundraising rounds. So, hey, the company's raising X dollars at Y valuation. And here's what they're going to do with the capital. A bunch of people look at the deal, some do it, some don't. Everyone kind of thinks of those as traditional fundraising rounds. Either alongside those rounds or in between those rounds, there are employees, founders, sometimes even investors, et cetera, that want liquidity, but there's no public market to go sell them into. There's no acquisition or anything like that. Those secondary market transactions can, one, be super valuable, right?

• 38:00Anthony Pompliano?

  Because it helps them get that liquidity that they need. Whether it's for, hey, we've got to liquidate our fund, or I want to put my kids in private school, or I just want to go buy my house. Right? You know, whatever it is. Yeah, get married, whatever it is. There's that, but also there's the ability for folks like you, if you're sitting there and you're like, hey, I want equity in this business, but there's no ability to do that. Oh, I found somebody who has some that wants to sell it to me. And then you can kind of facilitate those secondary transactions. It sounds like you've done that quite a bit, whether it was with Facebook.

• 38:29Speaker 02

  That's how I got into Coinbase, too. Like, I got, you know, I was told no on the B round in Coinbase. And so this sounds desperate, I know.

• 38:38Anthony Pompliano?

  Listen, there's no desperation, right? It's what's required.

• 38:42Speaker 02

  Yeah.

• 38:43Anthony Pompliano?

  It's what's required.

• 38:44Speaker 02

  So I started contacting, like cold calling and, you know, DM and Coinbase employees. I know, but, you know, so.

• 38:52Anthony Pompliano?

  And what was their response? Was there any good responses?

• 38:54Speaker 02

  I ended up getting in touch with, her name is Kristen, new employee at Coinbase. And she gave me a call and, you know, she's new, so she didn't have me stock. And I told her, you know, just let me know if you hear of anyone. I'd appreciate it. Next day, I get an email from Olaf.

• 39:12Speaker 02

  And so, you know, he put me in touch with

• 39:14Anthony Pompliano?

  Olaf was the first employee.

• 39:16Speaker 02

  First employee at Coinbase. And so Olaf put me in touch with people that were looking to sell. And that's how I got in. So I ended up buying from a group of employees at Coinbase.

• 39:25Anthony Pompliano?

  Yeah. But, but it speaks to kind of the persistence, right? It's like, hey, look, you go knock on the front door and they say, no, right? Then you kind of knock a second time, no, right? It's all right. Well, look, I'm either going to kick the door in, right? I'm going in the back door. So, you know, I'm getting in the house somehow.

• 39:40Speaker 02

  Exactly. And I was even thinking about, I should just go work for him because I wanted equity so much. I was willing to, you know, if I can't buy it, I was going to go out there and work.

• 39:49Anthony Pompliano?

  I love it. Yeah. And, and so you and Olaf, that wasn't the only time you guys hung out.

• 39:55Speaker 02

  No, no, we became friends.

• 39:56Anthony Pompliano?

  Yep. And so kind of talk a little bit about kind of your guys' relationship moving forward.

• 40:00Speaker 02

  Yeah. So it moved forward. So he ended up starting Polychain Capital. And I had the opportunity to be a general partner there and, you know, help build that. And, you know, and it's just, you know, it's been a great relationship.

• 40:12Anthony Pompliano?

  And what was the thought process behind starting Polychain?

• 40:17Speaker 02

  So when he told me the idea, I told him, you know, it was the best idea I've ever heard in my life. I've looked at thousands of business models over my lifetime as a professional investor. And this one's the best one I've ever, and it's still the best. You know, cryptocurrency hedge fund building in the space with the, you know, with the macro view, the looking out in the next 30 years, if you could do it like Olaf's doing it, which is, you know, the best way of doing it, where you focus on the long term and you're, you're building, you know, this new technology and helping develop it at early stage. You know, that's the best way to help the ecosystem. And so I'm just blessed to be a part of that, you know, as a general partner. And, you know, and I was also the first check in the fund as a limited partner.

• 41:03Anthony Pompliano?

  Yeah. And, and so the thought process there being it's a macro bet on an industry that is super small today. Right. Super small today and end up being really big in the future.

• 41:14Speaker 02

  Yeah. And I don't have the technical skills anymore to do that. So when I'm out, you know, meeting with the team out there, I feel like an idiot, you know? Yeah, I have the experience with the financial background and all that, you know? But yeah, I mean, those guys are super smart. I mean, you know, it's, yeah, they really know what they're doing and. Yeah, I'm proud of them.

• 41:37Anthony Pompliano?

  Yeah, for sure. And then you guys have done a lot of other stuff, right? So you ended up buying Bitcoin at some point, right? And tell a little bit about, you are one of the few that sold in December of 17. How, what was kind of the, the reason for doing that?

• 41:53Speaker 02

  Yeah, so we had like two pots of Bitcoin. So one is my, my personal pot. So I started buying that at like 400, it went up to 650. And then, you know, went down to 178, you know, so at one point I was down 60% on my investment. And this is when it was really early, right? And, you know, I was like, you know, I'm either early or I'm wrong. And so I doubled down on my research.

• 42:17Anthony Pompliano?

  Sometimes those are the same thing.

• 42:18Speaker 02

  Right, yeah, right. So I doubled down on my research and I figured I was early. So I ended up, you know, buying more and, and then at the same time, 2016, I had friends and family who wanted to get involved and we figured we would start this fund for them called Off the Chain Capital.

• 42:36Anthony Pompliano?

  It's a great name.

• 42:36Speaker 02

  Yeah, so we started Off the Chain Capital in 2016, just allowed friends and family to come in.

• 42:43Anthony Pompliano?

  So. We gotta talk about, where'd you get the name from?

• 42:45Speaker 02

  My wife came up with it.

• 42:46Anthony Pompliano?

  No way.

• 42:47Speaker 02

  Yeah, yeah, she's the hip hopper in the, in the family.

• 42:50Anthony Pompliano?

  Okay, all right. So this is my.

• 42:52Speaker 02

  I'm the nerd.

• 42:52Anthony Pompliano?

  This is my big, this is my big, uh, I'm shocked at how many people don't get the double entendre of off the chain.

• 43:00Speaker 02

  Yeah, I didn't get it either.

• 43:02Anthony Pompliano?

  Bit and chain and right, and, and so like there's all these crypto businesses that have the word chain or bit or whatever in the names, block, right, all this kind of stuff. But as a kid, we used to always say like, oh, that's off the chain.

• 43:14Speaker 02

  Yeah.

• 43:14Anthony Pompliano?

  Right? And it was like, uh, you know, kids, they use all kinds of words dope and, you know, all this kind of stuff. But that was just a phrase that we used. And so, uh, the first time that I was like, oh, off the chain, like that's off the chain, you know, the, the whole double meaning.

• 43:26Speaker 02

  Yeah.

• 43:27Anthony Pompliano?

  I remember being like, this is gonna be so obvious to people.

• 43:29Speaker 02

  Uh huh.

• 43:30Anthony Pompliano?

  Nobody ever says anything about it. And I don't know if it's because they're all coming in from, so crypto specific, right? But like, my friends are like, dude, are you kidding me? You started something called Off the Chain?

• 43:40Speaker 02

  Yeah.

• 43:41Anthony Pompliano?

  But they're not thinking about crypto, they're thinking about it in terms of the saying. So the fact that she came up with that, that makes me like her already.

• 43:46Speaker 02

  So, um, yeah, so she came up with, and like I said, she had to explain it to me what it meant. Cause I had never heard of Off the Chain before.

• 43:56Speaker 02

  You know, so I'm a social neo-fide or something. So I kind of live in my little hole.

• 44:01Anthony Pompliano?

  Yeah.

• 44:02Speaker 02

  So anyways, so we started off the chain capital, put about half a million dollars from friends and family. It spiked up to like $10 million in December 2017. And I was getting nervous because I was hearing Bitcoin advertised on the radio and a lot of people were talking about it. But the key was that I was at a Bitcoin meetup and this elder lady came up to me. She was late 70s probably, and she wanted to buy some Bitcoin. And she was talking to me about how to get involved with Bitcoin. And I was like, yeah, you know, it's probably not the right time. You know, it's kind of high right now. And she goes, well, I want to sell my GE stock and buy Bitcoin. And at the time GE was at an all time low. And being a value investor, I knew that was the wrong move for her.

• 44:47Speaker 02

  You know, I was like, well, I'll sell you some of my Bitcoin for your GE, just kind of joking. Not that we did that, but yeah, but when I got home that night, I was like, you know, it's the wrong time right now. You know, older investors are wanting to sell their GE stock, which is the all time low. To buy Bitcoin was the all time high. You know, that's just emotion, getting involved.

• 45:10Anthony Pompliano?

  Well, it goes back to your story about Walmart, right?

• 45:12Speaker 02

  Yeah.

• 45:12Anthony Pompliano?

  Is somebody knows what the price of GE stock is and they want to get rid of it, right? It's kind of the feeling of.

• 45:19Speaker 02

  Can't take the pain anymore GE, right?

• 45:21Anthony Pompliano?

  Yeah.

• 45:21Speaker 02

  Yeah.

• 45:22Anthony Pompliano?

  Okay. And so you go home and you just.

• 45:24Speaker 02

  I go home and yeah, I thought about it for a few days and I decided, you know, it's best just to let's liquidate the portfolio. So we sold 80% of the assets, returned the money to the LPs and then the shell of.

• 45:37Anthony Pompliano?

  They're probably pretty happy.

• 45:38Speaker 02

  Yeah, they were all happy. Yeah. Yeah. So and we gave them the choice, either taking cash or taking the crypto. About half of them took the cash, half of them took the crypto.

• 45:47Anthony Pompliano?

  Really?

• 45:48Speaker 02

  So we just, you know, it sent the crypto out to them. And then they wrote it down. Like I wrote mine down. I didn't sell my personal Bitcoin. You know, I just wrote it up, wrote it down. So.

• 45:59Anthony Pompliano?

  It's funny because the longer that people are around, the stronger the hands get.

• 46:04Speaker 02

  They are. Yeah.

• 46:04Anthony Pompliano?

  Right? I just saw the stat in 2018 or 2019, I think it was at the end. 10 million Bitcoin haven't moved in a year.

• 46:14Speaker 02

  I saw that too.

• 46:15Anthony Pompliano?

  Right? So you're talking about almost 50% of all Bitcoin ever created haven't moved in a year.

• 46:20Speaker 02

  Right.

• 46:21Anthony Pompliano?

  Pretty compelling. I think we're at 18 million have been mined. So you know, you got lost, stolen, what, you know, destroyed, whatever in there.

• 46:27Speaker 02

  The float's really not that big if you think about it.

• 46:30Anthony Pompliano?

  Yeah. Why, why you say that?

• 46:31Speaker 02

  Um, well, you got, um, the strong hands that aren't selling. You got the million or so that's, you know, satoshis, right? That's not moving. You have, you know, I think estimates are like 10%, maybe up to 15%. The keys are lost, you know? So the studies I've seen, there's probably, the float's around 6 million Bitcoin. Out of the 18 million that actually trades. So, you know, that's really not that much.

• 46:57Anthony Pompliano?

  Yeah. It's crazy, man. This is, uh, to me, I just think back and I say, you know, 20 years from now, when people look back at this thing, they're either gonna be like, these were the biggest idiots in the world, right?

• 47:09Speaker 02

  Right, I know.

• 47:09Anthony Pompliano?

  Like, look at all these millions of people who are idiots, or they're gonna be like, man, we missed what's probably gonna go down as, you know, one of the most disruptive things in finance.

• 47:19Speaker 02

  Right.

• 47:20Anthony Pompliano?

  You know?

• 47:20Speaker 02

  So being a value investor, people look at me like, how can you be a value investor and be involved in Bitcoin? And when you look at, um, value, you look at today's value, but with Bitcoin, you look at the future value, right? What's the future value? And so there are ways to determine what the future value is going to be. So, um, and this was the hardest thing for me to get my hands on at the very beginning. Took me two years to figure this out. Um, like what will Bitcoin be worth in the future? And there's ways to determine that. So Tom Lee at Fundstrat came out with a great model. It's based on Metcalf's law. So if you take, if you square the number of users, multiply that times the transactional value

• 48:01Speaker 02

  that's going through the Bitcoin blockchain, between 2014 and 2017, there was a 94% correlation to that model and the price of Bitcoin. And then from December 2017 to today, the R squared, the correlation's only 59%. So it dropped. And what happened in December 2017 was the ability to short Bitcoin. And so.

• 48:26Speaker 02

  What that means to me is that someone has their thumb on the price of Bitcoin today, keeping the price down because of the shorts that are out there. That regression model says that the fair price of Bitcoin today is $51,000. And it's at 8,000. So if those shorts close out, then I would think that Bitcoin will

• 48:46Anthony Pompliano?

  Do you think, okay, so this is important. It's one of the things that when people say to me, you know, what's happened before is gonna happen again. Can our history repeat itself? One of the big changes that makes me think and kind of pause for a second is the shorts, right? The ability for the derivatives and to go short, etc.

• 49:05Anthony Pompliano?

  What stops there being persistent short pressure?

• 49:09Speaker 02

  I think there will be short pressure, but they won't be as strong.

• 49:13Anthony Pompliano?

  You think that the longs are much stronger than the shorts?

• 49:17Speaker 02

  Right now, no. Yeah, today, the longs are stronger than shorts, but I think the shorts will eventually panic once Bitcoin hits an all-time high again. Because then they'll want to close out, because then it's breaking out. It's breaking out to new highs. And when it, once it hits 20, then it's at 50, like in a very short time period.

• 49:36Anthony Pompliano?

  Yeah.

• 49:36Speaker 02

  So.

• 49:37Anthony Pompliano?

  And to me, it's, you know, when you look at the short pressure, it's really not that much, but it's there.

• 49:43Speaker 02

  It's there.

• 49:44Anthony Pompliano?

  Right? And so it's interesting to see, you know, I go to look at the stock to flows, the Metcalfe law, you know, all these different things. That, to me, is the big thing is when you get this halving, you know, what happens? And do those models break or not because of the introduction of the shorts?

• 50:01Speaker 02

  Yeah, the stock to flow model is another great one. 95% correlation.

• 50:04Anthony Pompliano?

  Crazy.

• 50:05Speaker 02

  You know, so that's a good one. There's a Bitcoin to gold one, too. It has a 99% correlation.

• 50:12Anthony Pompliano?

  Really?

• 50:12Speaker 02

  So in 2012, it took 1/10 of an ounce of gold to buy one Bitcoin.

• 50:19Anthony Pompliano?

  Okay.

• 50:20Speaker 02

  Today, it takes 6 ounces of gold to buy a Bitcoin. And what that model says with a 99% correlation is that after the next halving, it's going to take about 85 ounces of gold to buy one Bitcoin.

• 50:33Anthony Pompliano?

  Really?

• 50:33Speaker 02

  And that has a 99%.

• 50:35Anthony Pompliano?

  How do they determine that?

• 50:36Speaker 02

  It's a formula that I found. Yeah, I'm not smart enough to come up with a formula, but yeah, but I have it. So.

• 50:43Anthony Pompliano?

  Got it. Yeah. Um, all right. So you guys have also invested in bankruptcy claims. Maybe tell us a little bit about kind of that strategy, how you came across it and how that works.

• 50:51Speaker 02

  Okay. So like I said, the fund was, you know, 80% liquidated in December 2017. Kind of sat there as a shell with my money and my son had a little bit of money in it. You know, it was, we didn't do any, there was no trading at all. Last summer I discovered some opportunities and bankruptcy proceedings that allow us to get access to Bitcoin for almost free.

• 51:13Anthony Pompliano?

  Okay.

• 51:13Speaker 02

  So, um, the way the claim works is that, um, there's this custodian that had Bitcoin. They went bankrupt. Each claim comes with about $784 of cash and then point one five Bitcoin and point one five Bitcoin cash.

• 51:29Anthony Pompliano?

  So if I, if I had one Bitcoin on this, uh, with this custodian, um, for every one Bitcoin I had, I now am owed $784 in cash.

• 51:40Speaker 02

  Right.

• 51:40Anthony Pompliano?

  Plus one point one five Bitcoin, point one five Bitcoin cash. Okay.

• 51:44Speaker 02

  So it's about $2,000 in value.

• 51:46Anthony Pompliano?

  And I have a claim. Basically it's saying, uh, I will get this in the future at some point.

• 51:51Speaker 02

  When the trustee, when the bankruptcy trustee distributes the assets, that's what you're going to get.

• 51:56Anthony Pompliano?

  Okay.

• 51:56Speaker 02

  Okay. Um, so, and the question is when will that happen? And that's how it happened sometime in the next one to three years, probably. So we're buying those claims, you know, from people who need to sell them because they have life events. You know, they are getting married or having a baby or need a house or they wrecked their car. They needed a car. So they're like forced sellers. So we're bidding on this fortress bids on these, um, you know, we're, we pay anywhere from $700 to $900 of claim. And so we're getting like $2,000 of value and that's a, and so when these claims get paid out, we're paying let's say $800 and we're getting $784 of cash. We're getting the Bitcoin and Bitcoin cash for almost free.

• 52:39Speaker 02

  And so those are those type of value investments that we're making in off the chain capital.

• 52:44Anthony Pompliano?

  Yeah, in something like that, what's the risk, right? So it's great. You put out 700 or 900 bucks. You get a piece of paper that says you're owed, you know, $784 in cash and then some Bitcoin, Bitcoin cash. What's the downside that they don't pay out?

• 52:59Speaker 02

  Yeah, there's a couple of downsides. So one, there's one lawsuit that still needs to be settled, Coin Labs. And if that gets, you know, paid out, then, you know, that's probably another, it's gonna reduce the cash by $62. So we may not get 784, it's something, something less than that. Another risk is that if Bitcoin goes up a lot and the trustee decides to sell the Bitcoin, and it goes up further, then we're stuck with cash instead of Bitcoin. So there's some, you know, upside cap potential. The trustees said they're not gonna sell any more Bitcoin. So.

• 53:34Anthony Pompliano?

  That's what they all say.

• 53:34Speaker 02

  Yeah, exactly. Yeah. But, you know, there's no guarantee that they won't.

• 53:38Anthony Pompliano?

  Yeah. How, um, how does the trustee in these bankruptcy type situations know when to liquidate or disperse? Like, what's the, is it just once every all of the lawsuits are settled?

• 53:53Speaker 02

  Yep, there's one more lawsuit.

• 53:54Anthony Pompliano?

  Got it. So once that's done.

• 53:55Speaker 02

  Once that's done, then they're free to distribute.

• 53:58Anthony Pompliano?

  Interesting. What other value opportunities you see in the market?

• 54:02Speaker 02

  So another thing that we do is we provide a liquidity pool for employees at blockchain companies. So, you know, there are a number of blockchain companies that are three to five years old now. You have employees that work there, 99% of their net worth is tied up in their company's stock, right? And, you know, and they have life events. You know, they're, like you said, married, divorced, babies, need a new home, wrecked a car, you know, whatever it is. And so they, they need liquidity to help, you know, diversify their portfolio, but also just pay expenses. And so, you know, we provide, you know, liquidity pool. We offer, you know, to buy stock from employees at these companies.

• 54:41Speaker 02

  And we generally get like a 20 to 30% discount from the last round, because it's an illiquid investment. And so, and so that's another thing that we do. So we buy, you know, stock from employees at these companies.

• 54:56Anthony Pompliano?

  Got it. And how do they find you? Like in terms of?

• 54:58Speaker 02

  Through the network. So I've been in the space for six years now, through the relationship at. Polychain and Digital Currency Group and just my network.

• 55:08Anthony Pompliano?

  Yeah.

• 55:08Speaker 02

  So that's how we we source.

• 55:09Anthony Pompliano?

  People know you're willing to buy.

• 55:11Speaker 02

  We're willing to buy, yeah. So any blockchain, any employees of blockchain companies out there, if you have a life event, you need to have some liquidity, let us know.

• 55:19Anthony Pompliano?

  Yeah. And it's funny too, because when you're known as bullish around something, naturally those opportunities are attracted to you, right? People start to realize, hey, you know, there's somebody talking about X. I think that this person can help and they kind of run over there.

• 55:34Speaker 02

  It's all friend, it's all, yeah, relationship.

• 55:35Anthony Pompliano?

  Yeah.

• 55:36Speaker 02

  It's a relationship business.

• 55:37Anthony Pompliano?

  For sure. What in the last six years, what's the biggest things that have changed in the industry?

• 55:43Speaker 02

  Well, when Bitcoin first started, people thought it was going to be like a cash payment system, right? And that use case totally failed. You know, it's, you know.

• 55:50Anthony Pompliano?

  Do you think it failed or we just haven't had enough time for it to?

• 55:53Speaker 02

  Well, I, I think there'll be a cash settlement system on top of Bitcoin.

• 55:58Anthony Pompliano?

  Oh, okay. Layer two, layer three.

• 56:01Speaker 02

  I don't think Bitcoin will be, well, I don't think we'll use Bitcoin to, you know, for a cash system. Because, you know, if you're not, if the block size is one megabyte, you can't use it as a, you know, there has to be something built on top of that that will interact with the Bitcoin blockchain. So I, I, we don't know what that is yet, you know, and, you know, maybe Lightning Network or Libra. You know, even like Venmo, you know, Venmo has the opportunity to interact with the, you know, Bitcoin blockchain in the future, so.

• 56:33Anthony Pompliano?

  You think they'll do it?

• 56:34Speaker 02

  Well, Wences is on the board of PayPal and PayPal owns Venmo, so, right? I mean, I don't think it's out of the question.

• 56:41Anthony Pompliano?

  Yeah. He, uh, you think he'll ever get credit for kind of all the work he did?

• 56:47Speaker 02

  What do you mean?

• 56:48Anthony Pompliano?

  Wences, just in terms of like, he really seeded Silicon Valley with, hey, this thing's real, right? Just the conversations and the people that he eventually convinced, et cetera. And to me, he's like one of the folks in the industry who just has never really kind of broken outside of the crypto industry, right? If you think about whether it's the Winklevosses, you know, Brian Armstrong, there's a lot of people who I think are known as having done certain work to kind of push this forward. But Wences, to me, is still kind of insulated inside of the crypto industry. And so it's interesting, he sits on the PayPal board, right? You know, like, like it's not just a crypto only thing for him, but, but, um, I don't know, he just. Seems like he's in a different place than than most in conversations.

• 57:33Speaker 02

  Yeah, I agree with that. Yeah.

• 57:35Anthony Pompliano?

  Yeah.

• 57:35Speaker 02

  So, I mean, he's a great leader for the space.

• 57:38Anthony Pompliano?

  Mm hmm. So we'll see. What's next for you guys? Like, what else are you guys looking at or excited about?

• 57:43Speaker 02

  Yeah, so we're just building, you know, we're out, you know, fundraising, you know, meeting with people and, you know, just trying to get people involved. So.

• 57:52Anthony Pompliano?

  And are there any investment opportunities you guys looked at over the last couple of years that initially you're like, wow, this is amazing? And then as you dug deeper into it, you're like, whoa, hold on a second. That was, you know, shiny on the outside, but.

• 58:03Speaker 02

  I see those all the time.

• 58:05Anthony Pompliano?

  All right. Well, like, maybe don't name one of them, but can you can you talk about like, why? Like, when you dug into it, what was the the issues?

• 58:12Speaker 02

  Yeah, it just revolves around trust.

• 58:16Anthony Pompliano?

  Okay.

• 58:17Speaker 02

  Yeah. So, you know, you you talk to people and they have this great idea. They're building this protocol. And you get deeper into it and you figure it, you know, you see it's leveraged up to 100 to one. Or the business model is just too risky. Or, you know, there's just, you know, you find out that, you know, they're just not, they tell you one thing and you find out something different, you know? So, yeah, you know, and like I said earlier, this is a relationship business and you can't trust the people you're working with. And I just, I don't deal with that. So I just kind of walk away.

• 58:50Anthony Pompliano?

  You you sound like a real venture capitalist now.

• 58:52Speaker 02

  Do I? I don't know. I mean, I'm still trying to figure that that job out, you know?

• 58:57Anthony Pompliano?

  I think you're doing just fine. What, speaking of that, before we get into rapid fire questions, what's the one thing that you know now that you would never have guessed when you first started doing more of like the venture capital than stock brokerage? What's like your big, your big lesson learned over the last six years or so?

• 59:16Speaker 02

  In crypto?

• 59:17Anthony Pompliano?

  Uh, no, just from like the venture investing.

• 59:19Speaker 02

  And then venture?

• 59:22Speaker 02

  What I know now.

• 59:23Anthony Pompliano?

  Yeah, just like, what was the biggest surprise or the biggest lesson you learned that you didn't expect?

• 59:28Speaker 02

  I, I think it was from the partner at A16Z that she said, just buy Bitcoin. Yeah, I mean, I should have just put all my money in Bitcoin, you know, instead of doing any of the VC stuff. My life would be simple and, you know, like.

• 59:41Anthony Pompliano?

  Much easier life.

• 59:42Speaker 02

  Don't have to deal with the companies and, uh, yeah. She was right. Yeah. I mean, she's a 100% right.

• 59:49Anthony Pompliano?

  I love that. Um, all right. You've been around for six years, so these rapid fires should be good. Uh, most important company in crypto.

• 59:56Speaker 02

  So I like to look at past and future.

• 59:58Anthony Pompliano?

  Okay.

• 59:59Speaker 02

  Okay. So past, definitely Coinbase.

• 1:00:01Anthony Pompliano?

  Okay.

• 1:00:02Speaker 02

  Just because they've helped give people access to, you know, KYC, AML access to crypto. You know, in a legal format that allows.

• 1:00:14Anthony Pompliano?

  In the US.

• 1:00:15Speaker 02

  In the US, that allow people to own it, you know, and, and they did it the right way. You know, they did, you know, by following the rules and, you know, doing it, you know, doing a great job doing that. Um, looking forward, I think backed has the potential.

• 1:00:29Anthony Pompliano?

  Backed, okay.

• 1:00:30Speaker 02

  Being, you know, one of the top companies in the space.

• 1:00:34Anthony Pompliano?

  Why?

• 1:00:36Speaker 02

  From what I know from what they're building today is that, you know, I think it's not give people the ability to have even more access through traditional financial means. You know, because, you know, our financial systems, but with brokerage firms and, you know, just the traditional finance thing that we've built over the last 50, 60 years. And with back being, you know, FinCEN regulated, FINRA regulated, SEC regulated. I, I think that's why I give the traditional finance people the ability to get exposure to the space with someone they're comfortable with, uh, you know, that's owned by the intercontinental exchange.

• 1:01:15Anthony Pompliano?

  Okay. What's the one rule or regulation you would change if you could?

• 1:01:20Speaker 02

  Definitely the accredited investor rule. Yeah, I mean. At this point, can we just call it a dumb rule? Yeah, so I met with Jay Clayton two years ago. Oh, did you? Yeah. All right, what was that like? So it's kind of a funny story. Oh, man, you're smiling, all right. So I get this call out of the blue from the SEC saying Jay Clayton is on me in St. Louis. I'm at the Federal Reserve Bank and he's looking, he just got hired by Trump. And he's looking to, you know, he's on this educational tour and they asked me to come meet with him. And I was like, how do you find out like, like, why, why would you contact me? Like, how do you know who I am? And, um, you know, I didn't ask that, but I was like, ah, sure. Yeah, it sounds like a privilege. I'll go meet with them. And so I'm heading down to the Fed Federal Reserve Bank in St. Louis.

• 1:02:05Speaker 02

  And I started thinking like, like I started freaking myself out a little bit like, like I'm in crypto and I'm going to the Fed. Yeah. And I meet with Jay Clayton. With the SEC, all right. With the SEC and I started getting nervous, you know? And I get down there and I'm kind of like, you know, jittery a little bit. And I walk in and there's two security guards and they asked for my wallet and my car keys. And I was like, oh, man. Yeah, I was like weird, you know? So I get my wallet, my car keys, and they walk behind a door or like another wall. And, um, and this lady comes up to me and she goes, are you Brian Estes? And I look at her and I was like, oh. Who's asking? Yeah, I was like, I was like, why are you asking that? Like, I was like, I'm like, who are you? And why are you asking me that?

• 1:02:49Speaker 02

  And, um, she goes, oh, our kids went to grade school together. I'm Lisa and I'm like, I'm like, oh yeah, Lisa, you know? And we started talking. Don't do that to me right now, Lisa. And then the guards came back and they had just scanned my wallet and my car keys, you know? And then they gave them back to me and then they escorted me out to meet with Jay Clayton. And there were a few other people up there too, to meet with them. And like I said, he was just on informational tour. And, um, so I met with them and. Like, thanks, Jay, you scared the shit out of me today. Yeah, so, so he was asking, what can we do at the SEC to make us, you know, better? And that's one thing I pointed out to him. I go, it's not fair, um, to have the SEC restrict people from investing in.

• 1:03:30Speaker 02

  Private companies, you know, if you don't have a certain net worth or a certain income, I go, it makes much more sense to base it on knowledge. I go, why don't you guys set up a website where people could take a test or get educated? And then if they pass that test, then they could be accredited. And he, you know.

• 1:03:50Anthony Pompliano?

  It's not that hard.

• 1:03:51Speaker 02

  Yeah, it's two years ago.

• 1:03:53Anthony Pompliano?

  And he. But to their credit, I think that they are trying to move in that direction. They're slow, right? But they're a big organization. They got a lot of risk, lawyers, whatever, right? And bureaucratic, but I do think that they're trying to move in that direction. It's just, I think most people wish it was a little bit faster.

• 1:04:07Speaker 02

  Yeah, but I think that's the one thing that needs to be done. Yeah, it should be your knowledge that determines whether or not you're accredited, not how big your bank account is.

• 1:04:17Anthony Pompliano?

  What's the most controversial thought you have in crypto? Like, what do you, what do you believe in? Everyone else disagrees with you on.

• 1:04:24Speaker 02

  Um, I don't like talking about this, but.

• 1:04:29Anthony Pompliano?

  Well, you came on a podcast, someone made you talk about it.

• 1:04:31Speaker 02

  So, um, I think Bitcoin's almost like a black hole. That's why I suck in so much value that we can't really imagine how high it's on go.

• 1:04:43Anthony Pompliano?

  I agree with that.

• 1:04:44Speaker 02

  Yeah, I just, I don't think we can imagine. I, I, I look back at people that were mining Bitcoin when it was at like a nickel in tons on some eight thousand day. They, they could never imagine be eight thousand, right? And I think in 20 years or 50 years or whatever, you know, eight thousand or it's a second so much value that, you know, we're not going to know where that.

• 1:05:05Anthony Pompliano?

  So there's two things here.

• 1:05:09Anthony Pompliano?

  I always think about the, uh, Bill Gates quote, right? We overestimate what we can do in one year, underestimate what we can do in 10, right? Definitely that happened with Bitcoin, uh, but two is, um.

• 1:05:24Anthony Pompliano?

  If you said to me, are we overhyping or underhyping Bitcoin? What you then have to do is you have to look at the potential. And I think most of us get too short sighted in what it could become. It's really hard to imagine, right? If you think about the internet when it first started, even 10 years in, nobody could imagine today walking around with this cellphone, you know, which I don't use to make very many calls. It's a supercomputer in my pocket, right? And so if you think about that, if you look at computing power, right? There's a photo one of my partners tweeted that I think it's like an IBM mainframe that today could hold like six photos, you know, in today's world, but they're pushing it into like an 18-wheeler.

• 1:06:09Anthony Pompliano?

  Right? Like literally pushing a mainframe into this big truck. Today, you have more computing power in your pocket.

• 1:06:17Speaker 02

  Right.

• 1:06:18Anthony Pompliano?

  And it's only, you know, what, maybe 80 years, 90 years later? Like so, long time, right? Like one lifetime, basically. But still, that's incredible. And so if you think about something like Bitcoin, if it works, right?

• 1:06:29Speaker 02

  If it succeeds. That's a big question, right?

• 1:06:32Anthony Pompliano?

  But if it works, I tend to agree with you that it is, it's something that we can't fathom.

• 1:06:37Speaker 02

  Yeah. And if you think about the basic concept of Bitcoin, I kind of look at it as DNS. So you had all these protocols that were developed in the early 90s, like HTTP and SMTP and DNS was one. And DNS actually has value, right? The domain name system. So back in the early 90s, I remember my friends were buying domain names and squatting on them. And I was like, why are you doing that? You know, that seems silly to pay, you know, 25 or 50 bucks for amazon.com or coca cola.com. And that's when there was just a few hundred thousand or a million people using the internet. But when there were billions of people using the internet, those domain names became valuable, right?

• 1:07:15Anthony Pompliano?

  Very.

• 1:07:16Speaker 02

  You know, how valuable is the amazon.com domain name today? If Amazon forgot to re-register their domain name and someone stole that from them and re-registered it, you know, like what would that be worth? What would Amazon pay? So my son actually did that. His high school forgot to register their domain. Name and he registered in his name when he was in high school and he was sixteen. What happened to him? No, he he asked me if he should sell it back to the school. And I was like, yeah, if you want to flunk out.

• 1:07:46Speaker 02

  But I was like, you probably should just give it back to him, you know? He goes, well, it's worth something. I'm like, yeah, it is worth something, right? Of course. Yeah, so domain names are kind of like Bitcoin. Yeah. You know, because it's, you know, domain DNS is open source protocol. Bitcoin is open source protocol, but as more and more people use Bitcoin, since there's a finite supply. When there's, you know, you know, billions of people use it in the future, it's gonna be worth more than it is today. Of course. So I look at it, Bitcoin and domain names or DNS all in the same package. Yeah. What um, what's the most important book you've ever read?

• 1:08:26Speaker 02

  Most important, I know you've talked about Think and Grow Rich. That really helped me a lot when I was younger. That book specifically, if you read it in your early twenties or like mid twenties, I think it's a perfect time to read it. I read it every three years. Oh, really? Yeah, I've read it like, you know, yeah, ten times. I love it. I I yeah, I I mean, I asked my kids to read it for my Christmas present last year.

• 1:08:53Speaker 02

  We had book club. Did they do it? Yeah, they did it. We we we read the book together and and went through chapter by chapter and talked about it and they're, my kids are in college. And they really enjoyed it. I didn't think they would. Yeah. And my wife read it too for the first time. That's awesome. And yeah, so and I give it out to people as gifts. So yeah, so that that's a great book. But the most important book I've read recently is probably the Bitcoin Standard. Yeah, I I just read that like two weeks ago. Great job with it. Yeah, yeah. So yeah, it's a great book. It's it's one of those books you read like, damn, I gotta go. Yeah. I'm not thinking big enough. Exactly. Uh, aliens, real?

• 1:09:32Speaker 02

  I mean, the probability is yes. I mean, yeah, you can't. So there's like probability of life form is a hundred. Nearly a hundred percent. The question is, is it advanced? You know, is it human like, you know, with a conscience? You think? I I think, yeah, I mean, yeah. Do they have pets?

• 1:09:54Anthony Pompliano?

  That's how it started, man.

• 1:09:55Speaker 02

  Yeah, I don't know. I mean, that's like, what like?

• 1:09:58Anthony Pompliano?

  Well, think about it, right? So how many, uh, we, we would relook at, uh, Joe, the other day we saw eight, eight million species in the world and on earth. Uh, there's no stats on how many of those species have pets.

• 1:10:11Speaker 02

  Let me ask you something.

• 1:10:12Anthony Pompliano?

  Weird question.

• 1:10:12Speaker 02

  Are there other animals on earth that have pets?

• 1:10:17Anthony Pompliano?

  Uh, yeah.

• 1:10:18Speaker 02

  Or are humans only have pets?

• 1:10:20Anthony Pompliano?

  No, they definitely have pets. So I'll give you a couple of examples. One is, uh, we've definitely seen things like, you know, the kangaroo that puts like some other animal in its pouch and like rolls around with it, right?

• 1:10:31Speaker 02

  I haven't seen that.

• 1:10:31Anthony Pompliano?

  Is it pretending that it's a kid or a pet? Like, are, are human kids, kids or pets, right?

• 1:10:37Speaker 02

  Yeah.

• 1:10:38Anthony Pompliano?

  Um, so that's one. Two is there's been, uh, situations where some big, you know, wild, uh, life type, uh, cat, for example, may raise, uh, a dog. Again, does it kid or a cat, right? Um, or a pet? Uh, and then what I saw in this other episode was, um, a friend of mine said, well, your dog has pets. Now your dog is got toys.

• 1:11:01Speaker 02

  Right.

• 1:11:02Anthony Pompliano?

  But it takes care of it like a pet, right? Now it's an inanimate object. So like, does the pet have to be, uh, conscious, intelligent, you know, all this kind of stuff? So it, it depends really kind of how you define the stuff, right? Without getting too kind of meta.

• 1:11:14Speaker 02

  So aliens have pets then?

• 1:11:16Anthony Pompliano?

  Well, well, so here's the thing, right? If the aliens are advanced, because if it's just, you know, bacteria and stuff like that, then, you know, whatever. Um, but, but to me it was more of, uh, it's a question that could really get to like how advanced, how civilized, how sophisticated are they?

• 1:11:29Speaker 02

  Right.

• 1:11:29Anthony Pompliano?

  Um, and again, it goes back to, you know, we think we're pretty smart, but like maybe we're the idiots.

• 1:11:33Speaker 02

  Yeah. There was something on the news, what, like just a couple of days ago about some radio frequency?

• 1:11:38Anthony Pompliano?

  Yesterday, high frequency radio waves from 36 billion miles away.

• 1:11:42Speaker 02

  Yeah.

• 1:11:42Anthony Pompliano?

  And.

• 1:11:43Speaker 02

  Or the Navy pilots that, you know, the.

• 1:11:45Anthony Pompliano?

  See the UFOs.

• 1:11:46Speaker 02

  Yeah, the UFO, those little Tic Tacs that they have on video. I mean, what are those?

• 1:11:50Anthony Pompliano?

  Yeah. And look, part of it is, uh, there are probably scientific explanations for, let's say all of it, right? Like literally every single thing you and I've ever thought about that could be alien related has an explanation. There is still such a big universe out there. Probability is, uh, you know.

• 1:12:07Speaker 02

  Yeah.

• 1:12:07Anthony Pompliano?

  The, the scary part is, uh, if they show up here, do we, are, do we welcome them?

• 1:12:14Speaker 02

  I mean, I guess everyone's gonna be scared, but I guess.

• 1:12:17Anthony Pompliano?

  The people who usually get invaded don't turn out so great for them. Right? Alright, what one question you have for me to finish up?

• 1:12:26Speaker 02

  What are you doing in 10 years?

• 1:12:28Anthony Pompliano?

  What am I doing in 10 years?

• 1:12:30Speaker 02

  Cause you're getting married, right?

• 1:12:31Anthony Pompliano?

  Yeah, I'm getting married.

• 1:12:35Speaker 02

  Are you?

• 1:12:36Anthony Pompliano?

  I think that there's one core thing in my life. Well, I don't know. We'll see about all that. I don't know how much say I have in that.

• 1:12:45Anthony Pompliano?

  But, uh, what am I doing in 10 years? I think that the safe, kinda common thread through everything I've ever done is learning, right? And whether it was, um, learning from an operator's perspective, from an investing perspective, doing, you know, this in terms of I just gotta sit and talk to people all day and learn.

• 1:13:04Anthony Pompliano?

  I think that that's just like something that I really gravitate towards and it's similar to a question. Uh, I've got a friend who, uh, he asks every single person he meets, he goes, if money didn't matter, what would you work on? Right?

• 1:13:16Speaker 02

  Right.

• 1:13:17Anthony Pompliano?

  And like some people's answers like materially change, right? If you're, you know, especially if you're working an hourly wage job, you're like, hey, look, I would give this up tomorrow if money didn't matter, cause I would go do something, you know, that they feel is more, uh, they're passionate about, meaningful, whatever. Then some people, their answer wouldn't change.

• 1:13:33Speaker 02

  Yeah.

• 1:13:34Anthony Pompliano?

  They say, look, I'd do this for free, right? Or, or if money didn't matter, I'd spend all my time doing this. I think that for me, uh, learning is, um, it's fascinating to me, right? I did an episode recently with a, uh, nuclear engineer who spent 20 years in the Navy and, uh, now he works on these nuclear power plants. I knew nothing about nuclear power. And I walked away and now I'm like, holy shit, like, that's a, you know, and you like go down this rabbit hole, right? And so being able to do that over and over and over again, uh, whether it's in conversations or it's reading or whatever, um, I think is fun. The hard part is, do you do that from like a professional standpoint? Is that more of a personal thing? You know, in what form does it take?

• 1:14:12Speaker 02

  Is it a hobby or a job, right?

• 1:14:13Anthony Pompliano?

  Yeah, and, and look, and, and some of those things might be the same thing, but it's also like, what form factor does it take? Do you just sit around and just read books all day, right? Like, maybe? Or do you, you know, take that learning and apply it somehow? I don't know, but I think that's just like the, the easy answer for me is something around learning new things is, uh, is exciting. What would you do? 10 years.

• 1:14:34Speaker 02

  10 years from now?

• 1:14:35Anthony Pompliano?

  Yeah.

• 1:14:36Speaker 02

  Probably play video games with my grandkids.

• 1:14:41Speaker 02

  So we never allowed our kids to have video games in the house when they were growing up.

• 1:14:45Anthony Pompliano?

  But the grandkids are definitely getting them.

• 1:14:47Speaker 02

  Grandkids are a different story, yeah.

• 1:14:50Anthony Pompliano?

  I love it, man. All right, well, listen, thank you so much for coming and doing this. You've got some amazing stories and I think.

• 1:14:56Speaker 02

  Thank you for having me. I appreciate it.

• 1:14:57Anthony Pompliano?

  Yeah, I think more people should know you and hopefully some good stuff comes out of this. So I'll do it again in the future.

• 1:15:03Speaker 02

  Sounds great. Thanks.

• 1:15:05Anthony Pompliano?

  Hey, everyone. Pop here. If you liked this episode of Off the Chain and want to help us take crypto to the top of the Apple, Spotify and other podcast charts, please do us a favor and rate, review and subscribe. To review, simply go to the Off the Chain homepage, scroll down until you see the five blank stars. Taking 15 seconds to fill those stars in and leave a quick review goes a long way in helping us take the entire crypto ecosystem to the top of the charts. I appreciate you listening and see you next time on Off the Chain.